What is a Consulting Agreement?

As industry experts, consultants are uniquely positioned to advise business owners on everything from macro to micro trends in the space. Consultants exist in every sector, however, finding an expert in the blockchain space is harder because of the industry’s nascency.

So when you discover a consultant that offers you the right advice and genuinely wants your business to succeed; it benefits both parties to draft a consulting agreement.

What is a Consulting Agreement?

A consulting agreement is a contract between a business and the consultant that provides their service. The document is also referred to as a consulting contract, freelance agreement, independent contract agreement, or business consulting agreement.

Both the business and the consultant use this agreement to protect their interests: the business ensures they get the advice they need and the consultant ensures they get compensated fairly. Other benefits of a consulting agreement include:

• Setting expectations.
• Determining a timeline.
• Establishing processes and policies.
• Documenting expenses.

What Does a Consulting Agreement Include?

All consulting agreements include names and contact details and though agreements vary in complexity, the following specifications and clauses are considered necessary inclusions:

1. Scope of Work and Compensation: The consulting agreement must state the services the consultant is to provide and how they’ll get compensated for it. A typical consulting agreement will include an exhibit, which allows the agreement to be amended as the consultant’s responsibilities increase or decrease over time.
2. Consultant Status: The agreement must indicate the consultant’s status as a contractor. This is an important distinction not only for tax purposes but ensuring that the consultant and their actions, clients, and advisory are not tied to your business.
3. Terms and Termination: The agreement must define how long the consultant is obligated to provide their services to the business. The contract agreement must also include conditions for termination to protect the business in case the consultant breaches the contract.
4. Non-Disclosure: Breaches include disclosing sensitive business information to rivals, which is why contract agreements need to accommodate a non-disclosure clause!
5. Conflict of Interest: Another type of breach is when a consultant you’ve hired also works with a rival company. Most consulting agreements also include a statement that the consultant will not solicit the client’s employees for at least the term of the agreement.
6. Other Clauses: These include dispute resolution clauses, contract extensions clauses, compensation related matters and more.

How To Draft and Execute A Consulting Agreement?

You need to hire a lawyer or law firm to draft a consulting agreement, but executing it is a different matter altogether. First, if your consultant is based in a different country, you have to amend the agreement so it’s valid in their jurisdiction (more lawyer fees). Second, enforcing the agreement abroad may require using third-party, unsecured digital signature services.

It’s safe to say drafting and executing a consulting agreement the current way is unsafe, expensive, and inconvenient. Fortunately, PAID has a solution: binding and executing the consulting agreement to the blockchain!

Why A Consulting Agreement on the Blockchain?

A blockchain-based consulting agreement offers the following advantages:

1. Self-Executing: Through smart contracts, self-executing code that triggers when predetermined conditions are met, the consulting agreement is valid as soon as both parties sign.
2. Secure: No more trusting hackable, cloud-based third-party services with your digital signatures. The blockchain is the most secure technology on the planet.
3. Immutable: The blockchain is an immutable record of transactions, this is especially useful if a consultant breaches the agreement and denies it. Since, once signed, your agreement can neither be altered nor lost, aiding with dispute resolutions if needed.

PAID DApp and the Consulting Agreement

The consulting agreement helps new entrepreneurs and freelancers protect themselves and navigate a highly globalized economy. It is going to be one of the many contract templates that PAID Network will be offering as part of the release of PAID DApp v2. These on-chain solutions will ensure our community is protected, allowing you to safely choose from a variety of templates to secure your business interests and #GETPAID.

The launch of PAID DApp v2 will be another step in the creation of the decentralized world. It leverages the power of the blockchain, demonstrating the disruptive impact of this new technology. With our consulting agreements, NDAs, and other templates, PAID is showing that on-chain solutions can play a major part in disrupting and enhancing legacy legal services.

Is a Consulting Agreement not the right type of document for your business? Check out our guide on the CIIAA, mutual NDAs, or Advisory Agreements.

About PAID

PAID Network seeks to redefine the current business contract, litigation, and settlement processes by providing a simple, attorney-free, and cost-friendly DApp for users and businesses to ensure they #GetPAID wherever they are in the world.

PAID technology leverages Astar to operate on both Ethereum and Polkadot ecosystems. PAID makes businesses exponentially more efficient by building SMART Agreements through smart contracts to execute DeFi transactions and business agreements seamlessly.

PAID streamlines backend legal operations with SMART Agreements, so that projects can focus on making their brand bigger and better.

For any questions for the PAID network, please feel free to reach out to us on our:

Website | Telegram | Twitter | Medium